Identity fraud presents difficult challenges for business entities or governmental agencies who unknowingly open or allow access to accounts, or who are deceived into providing products/services based on synthetic, stolen, or manipulated identity information. Therefore, such entities/agencies typically have a need to authenticate their customer's identities to avoid losses due to perpetrators of identity-related fraud.
Identity verification is often used to ensure that users provide information that is uniquely associated with their real identity. Certain forms of identity verification may rely on physical or documentary documents, such as a driver's license, utility bill, etc. However, many online authentication scenarios exist where physical documentary verification is not feasible or convenient. In such cases, non-documentary information can be provided by a user and utilized for identity verification. However, fraud perpetrators may attempt to overcome the identity verification by providing synthetic, stolen, or manipulated identity information.
Knowledge-based authentication (KBA) is an authentication process that can provide enhanced security and can be effective in thwarting fraudsters. KBA is a process in which the user is asked to answer at least one question based on the user's own knowledge. A good KBA question should not be easily guessed or determined through research, and it should have only one correct answer that a user can easily remember. The form and content of the KBA question, therefore, can vary widely, with a corresponding wide range of usability and effectiveness. However, traditional KBA is becoming less effective due to the relative ease in which answers to the typical KBA questions (e.g., maiden names, dates of birth, etc.,) can be determined by a quick Internet search.
Technically well-informed fraud perpetrators continue to develop sophisticated deception schemes to target authentication techniques that were once thought to be secure. Balancing the threats of identity fraud with efficient service for legitimate clients continues to present significant challenges for businesses and governmental agencies.